A. FIRM INFORMATION
Wells Financial Advisors, Inc. d/b/a TSW Wealth Management (“TSW” or the “Advisor”) is a Registered
Investment Advisor with the United States Securities and Exchange Commission, which is organized as an S
Corporation under the laws of the Commonwealth of Massachusetts. TSW was founded as Wells Financial
Advisors, Inc. in 1996 and is owned and operated by Managing Principal, Terry B. Wells and Principal, Sarah A.
Wells. This Disclosure Brochure provides information regarding the qualifications, business practices, and the
advisory services provided by TSW.
B. ADVISORY SERVICES OFFERED
TSW offers investment advisory services to individuals, trusts, and estates (each referred to as a “Client”).
Account Portfolio Management
TSW provides investment management services to its Clients. This is achieved through personal Client contact
and interaction while providing discretionary investment management and consulting services. TSW works with
each Client to identify their investment goals and objectives as well as risk tolerance and financial situation in
order to create a portfolio allocation. TSW will then construct a portfolio, consisting of low‐cost, diversified mutual
funds and/or exchange‐traded funds (“ETFs”) to achieve the Client’s investment goals. The Advisor does not
provide recommendations on individual stock and bonds, but may include pre‐existing individual stock and bond
positions in the managed account relationship at the request of a client. The client may engage TSW to provide
discretionary investment advisory services on a fee basis. TSW’s annual investment advisory fee is based upon a
percentage (%) of the market value of the assets placed under its management. Before engaging TSW to provide
investment advisory services, clients are required to enter into an Investment Advisory Agreement with TSW
setting forth the terms and conditions of the engagement (including termination), describing the scope of the
services to be provided, and the fee that is due from the client.
TSW’s investment strategy is primarily long‐term focused, but the Advisor may buy, sell or re‐allocate positions
that have been held less than one year to meet the objectives of the Client or due to market conditions. TSW will
construct, implement and monitor the portfolio to ensure it meets the goals, objectives, circumstances, and risk
tolerance agreed to by the Client. Each Client will have the opportunity to place reasonable restrictions on the
types of investments to be held in their respective portfolio.
TSW may recommend, on occasion, redistributing investment allocations to diversify the portfolio. TSW may
recommend specific positions to increase sector or asset class weightings. The Advisor may recommend employing
cash positions as a possible hedge against market movement, which may adversely affect the portfolio. TSW may
recommend selling positions for reasons that include, but are not limited to, harvesting capital gains or losses,
business or sector risk exposure to a specific security or class of securities, overvaluation or overweighting of the
position[s] in the portfolio, change in risk tolerance of Client, generating cash to meet Client needs, or any risk
deemed unacceptable for the Client’s risk tolerance.
Clients placed in the same or similar asset allocation percentage as other clients may have their securities traded
simultaneously, depending on each instance, which may allow for operational efficiencies not available to TSW if
client securities were traded individually. If the securities are not traded simultaneously, some accounts may be
modified before others. This may result in accounts being traded earlier inadvertently having an advantage over
accounts traded later.
TSW will provide investment advisory services and portfolio management services and will not provide securities
custodial or other administrative service. All Client assets will be managed within their designated brokerage
account, pursuant to the Client Investment Advisory Agreement.
Financial Planning and Consulting Services
To the extent it is specifically requested to do so, TSW may provide its clients with a broad range of financial
planning and consulting services (including non‐investment related matters) on a stand‐alone separate fee basis.
Financial Planning services are generally offered in connection with an investment management engagement. Prior
to engaging the client to provide financial planning and/or consulting services, the client will be required to enter
into a Financial Planning or Consulting Agreement setting forth the terms and conditions of the engagement,
describing the scope of the services to be provided, and the portion of the fee, if any, that is due from the client
prior to TSW commencing services. Services are offered in several areas of a Client’s financial situation, depending
on their goals, objectives and financial situation. Generally, such financial planning services will involve preparing
a financial plan or rendering a financial consultation for Clients based on the Client’s financial goals and objectives.
This planning or consulting may encompass one or more areas of need, including, but not limited to investment
planning, retirement planning, personal savings, education savings and other areas of a Client’s financial situation.
TSW’s financial planning and consulting services do not include investment implementation, supervisory,
management, or reporting services, nor the regular review or monitoring of the client’s financial plan or investment
portfolio, unless otherwise explicitly agreed upon in writing. In the event the client desires that TSW provide
investment supervisory or management services, such engagement shall be set forth in a separate Investment
Advisory Agreement between TSW and the client, for which services TSW shall be paid a separate and additional
fee.
Please Note: The client is under no obligation to engage the services of any third party professional recommended
during the financial planning process. The client retains absolute discretion over any implementation decisions
related to the financial planning portion of the engagement and is free to accept or reject any recommendation
from TSW in the financial planning process, including the use of a recommended third party professional. Please
Note: If the client engages any such recommended professional, and a dispute arises thereafter relative to such
engagement, the client agrees to seek recourse exclusively from and against the engaged professional. Please Also
Note: It remains the client’s responsibility to promptly notify TSW if there is ever any change in their financial
situation or investment objectives for the purpose of reviewing, evaluating or revising TSW’s previous
recommendations and/or services.
MISCELLANEOUS
Limitations of Financial Planning and Non‐Investment Consulting/Implementation Services
As indicated above, and to the extent requested by the client, TSW may provide financial planning and related
consulting services regarding non‐investment related matters, such as tax and estate planning, insurance, etc. on
a separate and additional fee basis per the terms and conditions of a Financial Planning and Consulting
Agreement. TSW does not serve as an attorney or accountant, and no portion of its services should be construed
as legal or accounting services. TSW may waive this additional fee at its discretion, depending upon the facts and
circumstances of the engagement. Please Note: We do not serve as an attorney or accountant, and no portion of
our services should be construed as same. Accordingly, we do not prepare estate planning documents or tax
returns. To the extent requested by a client, we may recommend the services of other professionals for certain
non‐investment implementation purpose (i.e. attorneys, accountants, insurance, etc.), including representatives
of TSW in their separate individual capacities as representatives of Purshe Kaplan Sterling Investments, Inc.
(“PKS”), an SEC registered and FINRA member broker‐dealer and/or as licensed insurance agents. The client is
under no obligation to engage the services of any such recommended professional. The client retains absolute
discretion over all such implementation decisions and is free to accept or reject any recommendation from TSW
and/or its representatives. Please Note: If the client engages any unaffiliated professional, recommended or
otherwise, and a dispute arises thereafter relative to such engagement, the client agrees to seek recourse
exclusively from and against the engaged professional. If, and when, TSW is involved in a specific matter (i.e.
estate planning, insurance, accounting‐related engagement, etc.), it is the engaged licensed professionals (i.e.
attorney, accountant, insurance agent, etc.), and not TSW that is responsible for the quality and competency of the
services provided.
Please Also Note‐Conflict of Interest: The recommendation by a TSW representative that a client purchase a
securities or insurance commission product from a TSW representative in his/her individual capacity as a
representative of PKS and/or as an insurance agent, presents a conflict of interest, as the receipt of commissions
may provide an incentive to recommend products based on commissions to be received, rather than on a
particular client’s need. No client is under any obligation to purchase any securities or insurance commission
products from a TSW representative. Clients are reminded that they may purchase securities and insurance
products recommended by TSW through other, non‐affiliated broker‐dealers and/or insurance agencies. Please
Further Note: Firm representatives maintain the above registrations/licenses primarily to continue to service
legacy variable annuity products and legacy variable universal life policies. Unless there is a client mitigating
circumstance or client directed request, Firm representatives do not offer commission based securities or
insurance products to Firm clients. In the event that a client requires an insurance policy, the Firm will generally
refer the client to an unaffiliated insurance agent, and neither the Firm, nor the representative, will receive any
portion of the commission earned by such agent. ANY QUESTIONS: TSW’s Chief Compliance Officer, Terry
Wells, remains available to address any questions that a client or prospective client may have regarding the
above conflicts of interest.
Cash Sweep Accounts.
Account custodians generally require that cash proceeds from account transactions or cash deposits be swept into
and/or initially maintained in the custodian’s sweep account. The yield on the sweep account is generally lower than
those available in money market accounts. To help mitigate this issue, TSW shall generally purchase a higher yielding
money market fund available on the custodian’s platform with cash proceeds or deposits, unless TSW reasonably
anticipates that it will need to utilize the cash proceeds to purchase additional investments for the client’s account.
Exceptions and/or modifications can and will occur with respect to all or a portion of the cash balances for various
reasons, including, but not limited to, the amount of dispersion between the sweep account and a money market fund,
the size of the cash balance, an indication from the client of an imminent need for such cash, or the client has a
demonstrated history of writing checks from the account.
Please Note: The above does not apply to the cash component maintained within TSW’s actively managed investment
strategy (the cash balances for which shall generally remain in the custodian designated cash sweep account), an
indication from the client of a need for access to such cash, assets allocated to an unaffiliated investment manager,
and cash balances maintained for fee billing purposes. Please Also Note: The client shall remain exclusively
responsible for yield dispersion/cash balance decisions and corresponding transactions for cash balances maintained
in any of the TSW’s unmanaged accounts.
Cash Positions.
TSW continues to treat cash as an asset class. As such, unless determined to the contrary by TSW, all cash positions
(money markets, etc.) shall continue to be included as part of assets under management for purposes of calculating
TSW’s advisory fee. At any specific point in time, depending upon perceived or anticipated market
conditions/events (there being no guarantee that such anticipated market conditions/events will occur), TSW may
maintain cash positions for defensive purposes. In addition, while assets are maintained in cash, such amounts
could miss market advances. Depending upon current yields, at any point in time, TSW’s advisory fee could
exceed the interest paid by the client’s money market fund.
Cybersecurity Risk.
The information technology systems and networks that TSW and its third‐party service providers use to provide
services to TSW’s clients employ various controls, which are designed to prevent cybersecurity incidents
stemming from intentional or unintentional actions that could cause significant interruptions in TSW’s operations
and result in the unauthorized acquisition or use of clients’ confidential or non‐ public personal information.
Clients and TSW are nonetheless subject to the risk of cybersecurity incidents that could ultimately cause them to
incur losses, including for example: financial losses, cost and reputational damage to respond to regulatory
obligations, other costs associated with corrective measures, and loss from damage or interruption to systems.
Although TSW has established its processes to reduce the risk of cybersecurity incidents, there is no guarantee
that these efforts will always be successful, especially considering that TSW does not directly control the
cybersecurity measures and policies employed by third‐party service providers. Clients could incur similar
adverse consequences resulting from cybersecurity incidents that more directly affect issuers of securities in
which those clients invest, broker‐dealers, qualified custodians, governmental and other regulatory authorities,
exchange and other financial market operators, or other financial institutions.
Pontera. TSW uses Pontera, a third party platform, to facilitate the management of held away assets such as
defined contribution
plan participant accounts, with discretion. Those clients who choose to engage TSW to
service their held away accounts will be provided a link to connect their outside accounts to the platform. Once
the client’s account(s) is connected to the platform, TSW will review the client’s current account allocations. TSW
will rebalance the connected outside accounts consistent with the client’s investment goals and risk tolerance.
Client account(s) will be reviewed ongoing, at least annually. To facilitate use of the Pontera platform, the client
securely logs into the Pontera site and entitles TSW to manage the assets. Pontera charges TSW 25 bps for each
managed account. Clients do not pay any additional fee to Pontera or to TSW in connection with platform
participation. TSW is not affiliated with the Pontera platform in any way and receives no compensation from
them for using their platform.
Client Retirement Plan Assets and use of Pontera. In connection with investment management, TSW may be
engaged to provide investment advisory services relative to the client’s 401(k) plan assets. In such event, TSW
shall allocate the retirement account assets among the investment options available on the 401(k) platform. TSW’s
ability shall be limited to making recommendations regarding the allocation of the assets among the investment
alternatives available through the plan. TSW will not receive any communications from the plan sponsor or
custodian, and it shall remain the client’s exclusive obligation to notify TSW of any changes in investment
alternatives, restrictions, etc. pertaining to the retirement account. Unless explicitly agreed upon in writing
through an Addendum to the Investment Advisory Agreements, TSW will not provide ongoing monitoring,
supervision of held‐away company retirement plans.
Variable Annuity Management
TSW also may render investment advisory services to clients relative to variable annuity product(s) that they may
own. In so doing, TSW either directs or recommends the allocation of client assets among the various investment
alternatives (generally subaccounts) that are available inside the variable annuity. The client assets shall be
maintained at the specific insurance company that issued the variable annuity. Please Note: In the event that
TSW is requested to provide advisory services with respect to a variable annuity, TSW’s advice is limited to the
investment alternatives provided by the variable annuity.
Please Note: Retirement Rollovers‐Potential for Conflict of Interest
A client or prospective client leaving an employer typically has four options regarding an existing retirement plan
(and may engage in a combination of these options): (i) leave the money in the former employer’s plan, if
permitted, (ii) roll over the assets to the new employer’s plan, if one is available and rollovers are permitted, (iii)
roll over to an Individual Retirement Account (“IRA”), or (iv) cash out the account value (which could, depending
upon the client’s age, result in adverse tax consequences). If TSW recommends that a client roll over their
retirement plan assets into an account to be managed by TSW, such a recommendation creates a conflict of interest
if TSW will earn new (or increase its current) compensation as a result of the rollover. If TSW provides a
recommendation as to whether a client should engage in a rollover or not (whether it is from an employer’s plan
or an existing IRA), TSW is acting as a fiduciary within the meaning of Title I of the Employee Retirement Income
Security Act and/or the Internal Revenue Code, as applicable, which are laws governing retirement accounts. No
client is under any obligation to rollover retirement plan assets to an account managed by TSW, whether it is
from an employer’s plan or an existing IRA. TSW’s Chief Compliance Officer, Terry Wells, remains available
to address any questions that a client or prospective client may have regarding the potential for conflict of
interest presented by such rollover recommendation.
Please Note: Use of Mutual and Exchange Traded Funds
Most mutual funds and exchange traded funds are available directly to the public. Thus, a prospective client can
obtain many of the funds that may be utilized by TSW independent of engaging TSW as an investment advisor.
However, if a prospective client determines to do so, he/she will not receive the TSW’s initial and ongoing
investment advisory services. Please Note: In addition to TSW’s investment advisory fee described below, and
transaction and/or custodial fees discussed below, clients will also incur, relative to all mutual fund and exchange
traded fund purchases, charges imposed at the fund level (e.g. management fees and other fund expenses). ANY
QUESTIONS: TSW’s Chief Compliance Officer, Terry Wells, remains available to address any questions that
a client or prospective client may have regarding the above.
Account Aggregation Platform
TSW may provide its clients with access to an online account aggregation platform (the “Platform”). The Platform
allows a client to view their complete asset allocation, including those assets that TSW does not manage (the “Excluded
Assets”). TSW does not provide investment management, monitoring, or implementation services for the Excluded
Assets. Therefore, TSW shall not be responsible for the investment performance of the Excluded Assets. Rather, the
client and/or their advisor(s) that maintain management authority for the Excluded Assets, and not TSW, shall be
exclusively responsible for such investment performance. Without limiting the above, TSW shall not be responsible for
any implementation error (timing, trading, etc.) relative to the Excluded Assets. The client may choose to engage TSW
to manage some or all of the Excluded Assets pursuant to the terms and conditions of an Investment Advisory
Agreement between TSW and the client.
Custodian Charges‐Additional Fees
As discussed below at Item 12, when requested to recommend a broker‐dealer/custodian for client brokerage
accounts, TSW generally recommends that Charles Schwab and Co., Inc. (“Schwab”) serve as the broker‐
dealer/custodian for client investment management assets. Broker‐dealers such as Schwab charge brokerage
commissions, transaction, and/or other type fees for effecting certain types of securities transactions (i.e.,
including transaction fees for certain mutual funds, and mark‐ups and mark‐downs charged for fixed income
transactions, etc.). The types of securities for which transaction fees, commissions, and/or other type fees (as well
as the amount of those fees) shall differ depending upon the broker‐dealer/custodian. While certain custodians,
including Schwab, generally (with potential exceptions) do not currently charge fees on individual equity
transactions (including ETFs), others do. Please Note: there can be no assurance that Schwab will not change its
transaction fee pricing in the future. Please Also Note: Schwab may also assess fees to clients who elect to receive
trade confirmations and account statements by regular mail rather than electronically. In addition to TSW’s
investment advisory fee referenced in Item 5 below, the client may also incur transaction fees to purchase securities
for the client’s account (i.e., mutual funds, exchange traded funds, etc.) in accordance with the broker‐
dealer/custodian’s transaction fee schedule. ANY QUESTIONS: TSW’s Chief Compliance Officer, Terry Wells,
remains available to address any questions that a client or prospective client may have regarding the above.
55ip and BlackRock
TSW has engaged 55I, LLC d/b/a 55ip (“55ip), a registered investment adviser with SEC, as a sub‐adviser to assist
TSW with the administration of portfolio strategies by providing ongoing rebalancing and tax‐loss harvesting.
TSW Clients must sign a limited power of attorney form via Schwab to participate in 55ip’s services. 55ip executes
trades with respect to assets in Client’s account(s) maintained at Schwab in accordance with the investment
objective and strategies as instructed by TSW. TSW has engaged BlackRock Fund Advisors (“BlackRock”) and the
use of BlackRock’s Custom Model Solutions (“CMS”) to assist in portfolio strategy and construction. TSW may
benefit by having certain program costs reduced or waived, which creates a potential conflict of interest. Clients
are not obligated to utilize these services. See further disclosures associated this program below at Items 5.
TSW considers the cost of the underlying investments as well as the cost of implementing the models when
deciding whether to use a given model or investment product on behalf of a client. TSW receives no monetary
benefits from Blackrock for the use of its models, but TSW does receive access to investment research and other
investment related tools.
Portfolio Activity
TSW has a fiduciary duty to provide services consistent with the client’s best interest. As part of its investment
advisory services, TSW will review client portfolios on an ongoing basis to determine if any changes are necessary
based upon various factors, including, but not limited to, investment performance, fund manager tenure, style
drift, account additions/withdrawals, and/or a change in the client’s investment objective. Based upon these
factors, there may be extended periods of time when TSW determines that changes to a client’s portfolio are
neither necessary nor prudent. Clients nonetheless remain subject to the fees described in Item 5 below during
periods of account inactivity. Of course, as indicated below, there can be no assurance that investment decisions
made by TSW will be profitable or equal any specific performance level(s).
Please Note: Socially Responsible Investing Limitations.
To the extent requested by the client, TSW may recommend Socially Responsible Investing. Socially Responsible
Investing involves the incorporation of Environmental, Social and Governance (“ESG”) considerations into the
investment due diligence process. ESG investing incorporates a set of criteria/factors used in evaluating potential
investments: Environmental (i.e., considers how a company safeguards the environment); Social (i.e., the manner
in which a company manages relationships with its employees, customers, and the communities in which it
operates); and Governance (i.e., company management considerations). The number of companies that meet an
acceptable ESG mandate can be limited when compared to those that do not, and could underperform broad
market indices. Investors must accept these limitations, including potential for underperformance.
Correspondingly, the number of ESG mutual funds and exchange‐traded funds are limited when compared to
those that do not maintain such a mandate. As with any type of investment (including any investment and/or
investment strategies recommended and/or undertaken by TSW), there can be no assurance that an investment
in ESG securities or funds will be profitable, or prove successful. TSW does not maintain or advocate an ESG
investment strategy, but will seek to employ ESG if directed by a client to do so. If implemented, TSW shall rely
upon the assessments undertaken by the unaffiliated mutual fund, exchange traded fund or separate account
portfolio manager to determine that the fund’s or portfolio’s underlying company securities meet a socially
responsible mandate.
Client Obligations
In performing our services, TSW shall not be required to verify any information received from the client or from
the client is other professionals, and is expressly authorized to rely thereon. Moreover, it remains each client’s
responsibility to promptly notify TSW if there is ever any change in his/her/its financial situation or investment
objectives for the purpose of reviewing/evaluating/revising our previous recommendations and/or services.
Please Note: Investment Risk
Different types of investments involve varying degrees of risk, and it should not be assumed that future
performance of any specific investment or investment strategy (including the investments and/or investment
strategies recommended or undertaken by TSW) will be profitable or equal any specific performance level(s).
Disclosure Statement
A copy of TSW’s written Brochure as set forth on Part 2A of Form ADV, along with our Form CRS (Relation
Summary) shall be provided to each client prior to, or contemporaneously with, the execution of the Investment
Advisory Agreement or Financial Planning and Consulting Agreement.
C. CLIENT ACCOUNT MANAGEMENT
Prior to engaging TSW to provide investment advisory services, each Client is required to enter into an Investment
Advisory Agreement with the Advisor that defines the terms, conditions, authority and responsibilities of the
Advisor and the Client.
• Establishing an Investment Policy Guideline – TSW, in connection with the Client, may develop a statement
that summarizes the Client’s investment goals and objectives along with the broad strategy[ies] to be
employed to meet the objectives.
• Asset Allocation – TSW will develop a strategic asset allocation that is targeted to meet the investment
objectives, time horizon, financial situation and tolerance for risk for each Client.
• Portfolio Construction – TSW will develop a portfolio for the Client that is intended to meet the stated goals
and objectives of the Client.
• Investment Management and Supervision – TSW will provide investment management and ongoing
oversight of the Client’s portfolio and overall account.
If you request, TSW may recommend the services of other professionals for implementation purposes. You are
under no obligation to engage the services of any such recommended professional. You retain absolute discretion
over all such implementation decisions and are free to accept or reject any recommendation from TSW. If you
engage any professional recommended by TSW, and a dispute arises thereafter relative to such engagement, you
agree to seek recourse exclusively from and against the engaged professional.
D. WRAP FEE PROGRAMS
TSW does not manage or place Client assets into a wrap fee program. Investment management services are
provided directly by TSW.
E. ASSETS UNDER MANAGEMENT
As of December 31, 2023, TSW managed $223,311,497 on a discretionary basis.